Overall business outlook
Bearing in mind the favourable market conditions described above in non-life and life/health reinsurance as well as our strategic orientation, we are looking forward to another good financial year in 2009. In view of our acquisition in life reinsurance we expect our gross premium in total business to grow by about 16%. This transaction will also improve the diversification of our earnings streams, since life reinsurance business – with its greater stability – will account for a significantly larger share of total business going forward.
As things currently stand, we expect to generate a return on equity in excess of 15%. This is subject to the premise that the burden of catastrophe losses does not significantly exceed the expected level and that there are no drastically adverse movements on capital markets. As in past years, the company is aiming for a dividend in the range of 35% to 40% of Group net income.
The expected positive cash flow that we generate ourselves from the technical account and our investments should – subject to stable exchange rates – lead to further growth in our asset portfolio. In the area of fixed-income securities we continue to stress the high quality and diversification of our portfolio.
+++ Good prospects for a successful 2009 financial year +++
In the course of the current financial year and beyond we expect further hardening of the non-life reinsurance markets and continuing favourable conditions in life and health reinsurance.
We define our long-term goals as follows:
In non-life reinsurance we are guided exclusively by profit rather than growth targets. Our goal here is to achieve an EBIT margin of at least 12.5% each year.
In life and health reinsurance, on the other hand, we have set ourselves an annual growth target of 12% – 15% for both gross premium income and the operating profit (EBIT).
On the Group level our return-on-equity target is at least 750 basis points above the risk-free interest rate.
Both the earnings per share and the book value per share also constitute central management ratios and performance indicators for our company. Our strategic objective is to increase these key figures – together with the operating profit (EBIT) – by double-digit margins every year.